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Seagate misses estimates, declines to give outlook

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CIOL Bureau
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LOS ANGELES, USA: Seagate Technology PLC missed margin and earnings estimates after an industry glut pummeled prices, and said it could not provide financial forecasts or any information about possibly going private.

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Seagate confirmed earlier this month that it was in talks to be taken private by an undisclosed buyer. Sources said private equity firms Kohlberg Kravis Roberts & Co and Bain Capital might be interested in Seagate.

The company said in a statement that because of "regulatory requirements," the company would not provide more details about its talks to possibly go private, and that it would not financial forecasts.

Seagate's results were overshadowed by arch-rival Western Digital Corp, which reported better-than-expected earnings on Tuesday.

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Seagate, the world's largest maker of hard-disk drives by revenue, said net income fell to $149 million, or 31 cents per diluted share, from $179 million, or 35 cents per diluted share, a year earlier.

Excluding items, the company reported earnings of 37 cents a share. Analysts expected EPS of 45 cents, according to Thomson Reuters I/B/E/S.

Seagate reported a gross margin of 20.4 percent as pricing remains tough. That was lower than its previous guidance for this year of 22 percent to 26 percent.

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One factor hurting hard drive companies is tablet computers, led by Apple Inc's iPad, which uses flash storage instead of hard-drives.

Revenue rose to $2.7 billion in the fiscal first quarter, which ended on Oct. 1. That compares to $2.66 billion a year ago, and was slightly below expectations of $2.72 billion, according to Thomson Reuters I/B/E/S.

Trading in shares of Scotts Valley, California-based Seagate were down nearly 1 percent in after-hours trading after closing at $15.21 on the Nasdaq.

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